Tuesday, July 21, 2009

Anand Mahindra on Tech Mahindra and Satyam

Verbatim transcript of the exclusive interview with Anand Mahindra on CNBC-TV18:

Q: Nobody suspected that it would lead to Satyam and all those things?

A: No, because it was working more as a sweatshop for British Telecom.

Q: Weren’t British Telecom partners?

A: They still are. I give them credit. It was an act of foresight on their part to recognise that they could come and see India as an offshore destination. Mind you that is before the whole IT miracle took place here.

Q: Way before Bangalore became a household name?

A: Yes.

Q: We ended by talking about Tech Mahindra and British Telecom, what actually happened out of that?

A: It was like there was intent to come and look at telephony and at that time the government was far from allowing anyone into telephony and then the chairman of that time Sir Valance, had this brilliant idea that India could be a source of very low cost and value for money software skills.

Q: When was this?

A: This was back in 1985-86, so this was one of the first ventures in this but you have to understand that it didn't start from a garage or from an entrepreneurial notion but it started from one large company looking at adding value to its services, still an act of foresight which is why the British Telecom actually remains today the largest off-shore company in India since they stared early.

So it was like a joint venture, it went along, was based in Pune and then kept supplying BT with what it needed but missed the boat completely and clearly by the time I became the Chairman in 1997.

Although it was cruising along very profitably, we were filled with a thinking that we had missed this boat and that’s when we really revamped it, brought in a completely new board and said can we catch up.

Q: And you have done okay haven’t you?

A: I think we have done okay and there has been tremendous amount of support from British Telecom in the first phase and then we have this dynamic board that we have which is very international.

We said, now we are a billion dollars, and now what’s the next orbit and are you going to be able to grow at this rate in the same vertical where we have established our dominance or is it time to become a more diversified player.

At that point if you choose to turn the latter trying to do it organically, it takes a lot more time. To get to critical mess and its reached a level of maturity in this industry. So you don’t have opportunities to grow as organically as fast as you did, hence the attractiveness of Satyam for us.

Q: Was it something you thought about for a long time when you read in the paper one day that Raju had confessed, did you say, hey I want that company?

A: Let me make a confession, we had actually thought about it a year earlier.

To be very honest that it happened where there were some reports about it of him being pursued by IBM and being played upon by IBM. That point I had a word with him.

In fact, essentially as Vineet Nayar said, this is a marriage made in heaven. At that time he was twice our size but I still saw a real fit because of the complement he added to the verticals.

I was always puzzled as to why he never came back to me. It looked so interesting for him. But now I know why.

Q: What happened then?

A: I reached out again when the Maytas issue surfaced. And again got no answer. I reached out through various intermediaries. And then the infamous confession took place. That was a process. The government in a very unique manner was transparent. As you know, transparency suits us fine. It always creates an advantage for us.
To read more, please, visit - Anand Mahindra: The auto maker who dreams of making films

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